Hilton forecast disappoints as traveling to U.S. gets costlier

(Reuters) - Hilton Worldwide Holdings Inc , owner of the Waldorf Astoria hotel brand, forecast lower-than-expected earnings for the first quarter and full year as a strong dollar makes it more expensive for foreigners to travel to the United States.

Hilton expects "recent sharp movements" of the dollar against the euro, Australian dollar and yen to hurt adjusted earnings before interest, tax, depreciation and amortization by $35 million-$45 million, Chief Financial Officer Kevin Jacobs said.

Starwood Hotels & Resorts Worldwide Inc , owner of the Sheraton and Westin brands, also forecast a profit below estimates last week, citing the strengthening of dollar that eats into revenue from outside the United States.

Hyatt Hotels Corp reported lower-than-expected quarterly revenue on Wednesday. Marriott International Inc is scheduled to report after markets close.

Hilton CFO said the impact from the dollar would be the hardest in the company's leased business. A significant portion of leased properties are outside the United States.

The owned and leased business brought in about 40 percent of Hilton's 2014 revenue.

The dollar <.DXY> is expected to keep rising after gaining nearly 13 percent against a basket of major currencies in 2014.

A 10 percent appreciation in the dollar typically results in about 2 percent fewer international visitors annually, Adam Sacks, president of Tourism Economics, told Reuters last month.

Fewer foreign tourists would especially hurt Hilton's key markets in New York and Hawaii.

Hilton's owned hotels business was "pretty reliant" on New York even after selling the Waldorf Astoria New York, Macquarie Research analyst Chad Beynon said.

The company, which also owns the Conrad brand, gets about three-quarters of its revenue from the United States.

The company said on Wednesday it expected an adjusted profit of 10-12 cents per share for the first quarter and 78-83 cents per share for the full year.

Analysts were expecting earnings of 15 cents per share for the first quarter and 85 cents for the year, according to Thomson Reuters I/B/E/S.

Hilton's quarterly adjusted profit narrowly missed market expectations despite a 7 percent rise in revenue.

The company's shares were down 0.5 percent at $28.51 in afternoon trading on the New York Stock Exchange.

(Writing by Joyjeet Das; Editing by Don Sebastian)

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